Energy price cap could be ditched to encourage companies to reduce bills

The price cap currently stands at £2,074 a year for a home with average usage paying bills by direct debit. Analysts Cornwall Insight believe it will go down to £1,824, although part of the decline is because typical consumption levels have been revised downwards.

The impact will be especially acute on households which use less energy, which tends to include the poorest families, because the standing charge which must be paid regardless of usage is set to increase even as the cost per unit of energy falls. “The war in Ukraine changed that, and given that the world looks like an increasingly unsettled and conflicted place, for the foreseeable future, this will continue to impact on energy prices domestically and elsewhere.

Citizens Advice said it was helping a record number of people with debts relating to their energy costs, and called on ministers to “step in with additional bill support to help people through the winter”. Benefits claimants are entitled to support payments over the coming months but those run out in early 2024.

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